1981 (3) TMI 248 - Board - Central Excise

Summary

Issues:
1. Appeal against order for payment of Central Excise duty on pack sheets and twine.
2. Interpretation of Cess as "Duty of Excise" and its relation to Central Excise duty.
3. Provisional nature of the order for payment of Central Excise duty.
4. Consideration of High Court decision on Cess levy before deciding on Central Excise duty.
5. Legality of the order under appeal as a provisional order.

Analysis:
The appeal was filed against an order requiring payment of Central Excise duty on pack sheets and twine produced in the appellant's factory before being used as packing material. The Collector's order specified payment of Central Excise duty and Special Excise duty from a certain date due to a Writ Petition filed by the appellants regarding the levy of Cess on Jute Twine captively consumed. The consultants argued that the Cess collected on jute goods is essentially a "Duty of Excise," subject to the provisions of the Central Excises and Salt Act, 1944. They highlighted the provisional nature of the order and the potential impact of the pending writ petition on the levy of Central Excise duty and Special Excise duty.

During the personal hearing, the consultants reiterated their submissions, emphasizing that the Collector's order only pertained to the demand for Central Excise duty and Special Excise duty, while the issue of Cess levy on captively consumed twine was sub judice before the Calcutta High Court. The consultants also outlined the challenges they would face if duty was paid on packing materials before actual utilization for packing jute goods. The Board carefully considered these arguments and observations made during the hearing.

The Board acknowledged that Cess is a form of excise duty and recognized the importance of the High Court's decision on the Cess levy in relation to the determination of Central Excise duty and Special Excise duty. It noted that the order under appeal, despite appearing final, was actually provisional, as indicated by the phrase "only for the time being." Consequently, the Board concluded that the order lacked legal sustainability as an adjudication order.

In light of the above circumstances, the Board decided to set aside the original order and remand the case to the Collector for a final decision. The Collector was instructed to consider the outcome of the Calcutta High Court's decision on the Cess levy mentioned in the writ petition before issuing a definitive order on the payment of Central Excise duty and Special Excise duty.